Industry groups revive push to end patent-fee diversion

A broad coalition of intellectual property and business associations made a last-ditch attempt Wednesday to persuade appropriations negotiators to adopt language from a House bill concerning user fees for the Patent and Trademark Office (PTO).

If the lawmakers cannot agree to the language that would allow the PTO to keep all of the fees generated by its work, the coalition said in a letter to the leaders of the House Appropriations Committee, they should drop language that would increase user fees for patent applications.

As part of its spending bill to fund the Commerce, Justice and State departments in fiscal 2005, the House adopted language that would forbid diversion of the fees to other federal projects, a practice that has become common in recent years.

The Senate did not include similar language in its version of the legislation, which now is set to become part of a larger omnibus appropriations measure for even more departments and agencies. The smaller Senate-passed bill would increase PTO's budget by more than $320 million, for a total fiscal 2005 allocation of $1.5 billion. The money would come from an increase in PTO user fees.

The coalition urged adoption of the House approach "or some other effective anti-diversion provision."

The groups include the American Intellectual Property Law Association, Biotechnology Industry Organization, Computing Technology Industry Association, Intellectual Property Owners Association (IPO), International Trademark Association, Medical Device Manufacturers Association, National Association of Manufacturers and the U.S. Chamber of Commerce.

The groups objected to Senate appropriators' solution to the issue of patent-fee diversion: a one-year fee increase for patent applications.

"A one-year increase lacks the stable funding stream the PTO needs to hire new examiners and improve PTO operations," the groups wrote. "Already, the average time it takes to get a patent is more than 27 months (and more for some technologies), and the quality of patent examinations has suffered under inadequate funding."

The authors called the Senate language "unacceptable" and said it "totally ignores the premise that initially secured the user community's support of a fee increase -- ending the 12-year practice of fee diversion."

Spokesmen for the House and Senate Appropriations committees declined to comment on the details or status of the talks.

Another House-passed bill, H.R. 1561, would increase PTO fees long term and stop fee diversions. The Senate Judiciary Committee has approved that measure, too.

"We need to maintain our Patent and Trademark Office; it's the best Patent and Trademark Office in the world," IPO Executive Director Herbert Wamsley said.

Wamsley and IPO members recently visited China and met with its patent officials. He said the United States needs to make changes to stay competitive. China is facing similar problems in the lag between patent applications and approval, a figure known as pendency.

"The Chinese patent and trademark office is working to improve itself at a time when ours is going in the wrong direction for lack of funding," he said.

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